Mortgage application volume slows as interest rates rise
Mortgage application volume fell 5.6% from one week earlier as rising interest rates put an end to the recent surge in refinancings, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending April 5, found that the refinance index decreased 11% from the previous week.
"Mortgage rates inched back up last week, but remain substantially lower than they were in the second half of last year," Mike Fratantoni, the MBA's senior vice president and chief economist, said in a press release. "As quickly as refinance activity increased in recent weeks, it backed down again in response to the rise in rates."
The refinance share of mortgage activity decreased to 44.1% of total applications from 47.4% the previous week.
"However, this spring's lower borrowing costs, coupled with the strong job market, continue to push purchase application volume much higher," Fratantoni said.
The seasonally adjusted purchase index increased 1% from one week earlier, while the unadjusted purchase index increased 1% compared with the previous week and was 13% higher than the same week one year ago.
Adjustable-rate loan activity decreased to 7.6% from 9.5% of total applications, while the share of Federal Housing Administration-insured loans increased to 9.6% from 8.8% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 11.1% from 10.4% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.6% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 4 basis points to 4.4%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 7 basis points to 4.28%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased 1 basis point to 4.42%. For 15-year fixed-rate mortgages, the average increased 5 basis points to 3.83%. The average contract interest rate for 5/1 ARMs increased 1 basis point to 3.78%.